Adams Outdoor Advertising Ltd v. PA Dept of Transportation

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

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No. 18-2409

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ADAMS OUTDOOR ADVERTISING

LIMITED PARTNERSHIP,

a Limited Partnership Organized Under the Laws

of the State of Minnesota,

by its Managing General Partner, Adams Outdoor GP, LLC,

Appellant

v.

PENNSYLVANIA DEPARTMENT OF

TRANSPORTATION;

LESLIE RICHARDS, Individually and in her capacity

as Secretary of Transportation,

Acting as the Chief Executive Officer of the Pennsylvania

Department of Transportation

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Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civil Action No. 5-17-cv-01253)

District Judge: Honorable Joseph F. Leeson

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Argued March 5, 2019

Before: SMITH, Chief Judge, AMBRO,

and RESTREPO, Circuit Judges

(Opinion filed: July 15, 2019)

Victor F. Cavacini (Argued)

Gross McGinley

33 South 7th Street

P.O. Box 4060

Allentown, PA 18105

Counsel for Appellant

Josh Shapiro

Attorney General

Claudia M. Tesoro (Argued)

Senior Deputy Attorney General

J. Bart DeLone

Chief Deputy Attorney General

Office of Attorney General

1600 Arch Street, Suite 300

Philadelphia, PA 19103

Counsel for Appellee

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OPINION OF THE COURT

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AMBRO, Circuit Judge

Adams Outdoor Advertising, L.P., wants to install a

billboard near an interchange on U.S. Route 22 in Hanover

Township, Pennsylvania. Adams sought a permit from the

Pennsylvania Department of Transportation (“PennDOT”), but

it denied the permit under a provision of Pennsylvania law that

prohibits “off premise” billboards within 500 feet of a highway

interchange. Adams contends that provision—called the

“Interchange Prohibition”—violates the First Amendment

because it is too vague or, alternatively, because it does not

survive First Amendment scrutiny. Adams also claims that

PennDOT’s permitting requirement for highway billboards

separately violates the First Amendment because there is no

time limit for its decisions on applications.

The District Court ruled in Adams’ favor on the time-

limit claim and entered an injunction barring the enforcement

of the permit requirement until PennDOT establishes

reasonable time limits on its permit decisions. It dismissed,

however, Adams’ vagueness challenge on the pleadings and

entered summary judgment against Adams on its First

Amendment scrutiny challenge.

We affirm in part and reverse in part. As to the former,

we join the District Court in concluding that PennDOT’s

permit requirement violates the First Amendment because it

lacks a reasonable time limit for permit determinations, and

thus sustain the injunction. Further, we affirm the Court’s

dismissal of Adams’ vagueness challenge because the

Interchange Prohibition communicates clearly what it

prohibits. But we cannot sustain its entry of summary

judgment in favor of PennDOT Secretary Richards on Adams’

challenge to the scrutiny required to assess the Interchange

Prohibition. Although we conclude the Prohibition is not

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subject to strict scrutiny, the record is insufficient to establish

the required reasoning for the prohibition. We thus reverse on

that claim and remand for further proceedings.

I. Background

A. Statutory Background

The Highway Beautification Act of 1965, 23 U.S.C.

§ 131, establishes a framework for federal–state agreements

governing the size, lighting, and spacing of outdoor advertising

signs (colloquially, “billboards”) near highways. States that do

not enter into and comply with their federal–state agreements

under the Beautification Act lose certain funds for highway

programs. See 23 U.S.C. § 131(b).

Pennsylvania meets its obligations under the

Beautification Act through the Pennsylvania Outdoor

Advertising Control Act of 1971, 36 Pa. Stat. §§ 2718.101–

.115. PennDOT administers the Act through its Secretary,

defendant-appellee Leslie Richards. 36 Pa. Stat. § 2718.106.

Two aspects of the Act are relevant in this appeal. First,

its Interchange Prohibition bars the installation of any billboard

within 500 feet of an “interchange” or “safety rest area” unless

the billboard is an “official” or “on premise” sign as defined in

23 U.S.C. § 131(c). See 36 Pa. Stat. § 2718.105(c)(2)(i), (iv).

Second, the Act sets up a permitting regime requiring persons

to obtain permits from either PennDOT or a PennDOT-

authorized entity to install billboards regulated by the former.

See 36 Pa. Stat. § 2718.107. The Act does not establish a time

limit to decide permit applications.

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B. Facts and Procedural History

Adams is a company that acquires or leases private land

to install and maintain outdoor advertising signs as a medium

of communication by the public. It receives the customer’s

desired message, secures permits, and installs the message on

a sign. All the signs Adams installs are “off premise” signs—

that is, they communicate a message concerning neither the

specific property where the sign is displayed nor the business

or activities that occur there. An example of an “off premise”

sign would be one advertising a law firm, a political campaign,

or any other business or organization that does not operate on

the location where the sign is installed.

In March 2016 Adams applied to PennDOT for a permit

to install a billboard alongside U.S. Route 22 in Hanover

Township. The application remained pending for more than a

year. During that time Adams filed this lawsuit, which

prompted PennDOT to act. It denied the application because

the billboard’s proposed location was less than 500 feet from a

highway interchange in violation of the Interchange

Prohibition.

Adams named both Secretary Richards and PennDOT

as defendants, but PennDOT was dismissed early in the

proceedings. Adams does not challenge that dismissal on

appeal. The Complaint alleges six claims under the First

Amendment, three of which are relevant here: the Interchange

Prohibition violates the First Amendment because (1) it is too

vague, (2) it is a content-based regulation that on its face cannot

survive the scrutiny called for by the Amendment, and (3) its

permitting requirement does not impose a time limit on

PennDOT to rule on applications.

The District Court dismissed the vagueness challenge

on the pleadings. Adams Outdoor Advert. Ltd. P’ship v. Pa.

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Dep’t of Transp., 307 F. Supp. 3d 380, 390–93 (E.D. Pa. 2018).

It also denied the motion to reconsider that dismissal. Adams

Outdoor Advert. Ltd. P’ship v. Pa. Dep’t of Transp., 321 F.

Supp. 3d 526, 534–35 (E.D. Pa. 2018). The other two claims

went through discovery. The Court then granted summary

judgment for Secretary Richards on the First Amendment

scrutiny challenge to the Interchange Prohibition. Id. at 535–

39. But it granted summary judgment for Adams on the permit

challenge and issued an injunction prohibiting PennDOT from

enforcing the Act’s permitting requirement until it issues rules

establishing time constraints for its decisions on applications.

Id. at 541–45.

On appeal, Adams challenges the District Court’s

resolution on all three of these claims. Although Adams won

summary judgment on the last issue, it contends the proper

relief is an injunction compelling the Pennsylvania General

Assembly to amend the Act. Secretary Richards contends the

District Court should not have entered an injunction at all,

though she did not appeal the District Court’s decision granting

it and acknowledged at oral argument that she is not

challenging it.

II. Jurisdiction and Standard of Review

The District Court had jurisdiction under 28 U.S.C.

§ 1331. We have jurisdiction under 28 U.S.C. § 1291 and

review de novo its orders granting summary judgment and

granting Secretary Richards’ motion to dismiss for failure to

state a claim. Dwyer v. Cappell, 762 F.3d 275, 279 (3d Cir.

2014); Vorchheimer v. Phila. Owners Ass’n, 903 F.3d 100, 105

(3d Cir. 2018). We review the District Court’s “fashioning of

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a remedy according to an abuse of discretion standard.”

Anderson v. Davila, 125 F.3d 148, 159 (3d Cir. 1997).

III. Discussion

A. Vagueness Challenge

Our Supreme Court has identified two grounds on

which to hold a statute impermissibly vague. “First, if it fails

to provide people of ordinary intelligence a reasonable

opportunity to understand what conduct it prohibits.” Hill v.

Colorado, 530 U.S. 703, 732 (2000). “Second, if it authorizes

or even encourages arbitrary and discriminatory enforcement.”

Id.

We join the District Court in concluding that Adams

failed to allege either form of vagueness. The Interchange

Prohibition clearly conveys what it prohibits. It bans the

installation of billboards within 500 feet of either side of an

interchange on a divided highway, other than “official” or “on

premise” billboards, as defined by federal law. Official signs

are “[d]irectional or other official signs or notices erected and

maintained by public officers or agencies . . . for the purpose

of carrying out an official duty or responsibility.” 23 C.F.R.

§ 750.105(a) (incorporated into the Interchange Prohibition by

reference, see 36 Pa. Stat. § 2718.105(c)(2)(iv), 23 U.S.C.

§ 131(c)). On-premise signs are those that “advertise the sale

or lease of, or activities being conducted upon, the real property

where the signs are located.” 23 C.F.R. § 750.105(a)

(incorporated into the Interchange Prohibition by reference,

see 36 Pa. Stat. § 2718.105(c)(2)(iv), 23 U.S.C. § 131(c)). The

Prohibition is clear enough that a person of ordinary

intelligence would “understand what conduct it prohibits.”

Hill, 530 U.S. at 732. The provision also does not give

PennDOT authorization to enforce arbitrarily or in a

discriminatory way. When construing the provision, its

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discretion is cabined by explicit distance measurements, and

Adams does not allege any facts suggesting PennDOT applies

those metrics in an arbitrary or discriminatory manner.

Adams instead complains that PennDOT’s

interpretation of its 500-foot radius has changed a few times

since the provision’s enactment in 1971. At times between

1971 and 1997, PennDOT construed the provision’s 500-foot

radius to extend from highway interchanges on only one side

of a divided highway. That position altered in 1997, when

PennDOT issued a guidance letter (the “1997 Strike-Off

Letter”) establishing its position—held continuously since

then—that the Interchange Prohibition applies to both sides of

a divided highway.

Adams asserts the changes in PennDOT’s interpretation

prove the Interchange Prohibition is unconstitutionally vague.

We disagree. Although the provision is broad enough to permit

more than one agency interpretation, that does not mean it is

unconstitutionally vague. That is so because in evaluating a

vagueness challenge to a state law, “a federal court must, of

course, consider any limiting construction that a state court or

enforcement agency has proffered.” Vill. of Hoffman Estates

v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 494 n.5

(1982). In other words, we can consider the 1997 Strike-Off

Letter when evaluating the vagueness challenge of Adams, and

that letter cures the supposed vagueness it asserts.

Accordingly, we affirm dismissal on the pleadings of

Adams’ vagueness claim.

B. Scrutiny Challenge to Interchange

Prohibition

Adams also contends the Interchange Prohibition is a

content-based restraint of speech that is subject to, and does not

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satisfy, strict scrutiny—that is, the requirement that a law must

further a compelling government interest by the least

restrictive means. See Free Speech Coal., Inc. v. Attorney

General, 825 F.3d 149, 164 (3d Cir. 2016).

Before reaching the merits of this claim, we address a

question raised by the District Court: whether Adams has

standing to challenge the Interchange Prohibition’s exemption

of official and on-premise signs even though it does not wish

to install either of those sign types. Standing requires (1) an

“injury in fact” that is (2) “fairly traceable to the challenged

action of the defendant” and (3) capable of a court remedy. Id.

at 165 (internal quotation marks and citation omitted).

We conclude Adams has standing. Its liberty to speak

is restrained by PennDOT’s enforcement of the Interchange

Prohibition, and an order invalidating that provision would

restore that liberty. It does not matter, for purposes of our

standing analysis, that Adams challenges the Prohibition by

pointing to exemptions for which it does not qualify.

Challengers of outdoor advertising restraints often point to

exemptions enjoyed by others when seeking to challenge a

restraint as contrary to the First Amendment. See, e.g., Reed v.

Town of Gilbert, 135 S. Ct. 2218, 2230 (2015); Riel v. City of

Bradford, 485 F.3d 736, 748–54 (3d Cir. 2007). That approach

is proper here.

As to the merits, we begin by determining what level of

First Amendment scrutiny to apply to the Prohibition. Adams

contends it is subject to strict scrutiny because it exempts

“official” and “on premise” signs.

We deal first with the exemption for official signs. As

noted, they are “[d]irectional or other official signs or notices

erected and maintained by public officers or agencies . . . for

the purpose of carrying out an official duty or responsibility.”

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23 C.F.R. § 750.105(a). These are forms of government

speech, and an exemption for them does not trigger strict

scrutiny. See Pleasant Grove City v. Summum, 555 U.S. 460,

467–68 (2009); accord Town of Gilbert, 135 S. Ct. at 2233

(Alito, J., concurring). Adams does not meaningfully dispute

this point.

The exemption for on-premise signs is a closer call. As

noted, they “advertise the sale or lease of, or activities being

conducted upon, the real property where the signs are located.”

23 C.F.R. § 750.105(a). An example is a sign advertising a

restaurant that is installed on the property where the restaurant

is located. The leading decision by our Court in this area is

Rappa v. New Castle County, 18 F.3d 1043 (3d Cir. 1994).

There we set out a framework for reviewing the

constitutionality of outdoor advertising regulations that

provide exemptions for signs that convey messages with a

“significant relationship” to the property where they are

located. Id. at 1065–66. We drew a distinction between two

kinds of on-premise signs: (1) those that advertise the

“activities conducted on the premises,” and (2) those that

advertise “the sale or lease of the real property on which they

are located.” Id. at 1066–67 & n.42.1 For both, Secretary

1

Adams presses us to deviate from Rappa and apply strict

scrutiny under Town of Gilbert, 135 S. Ct. at 2230–31. We

decline. That case did not address an exemption for on-

premise signs, and the concurring opinions by Justices Alito

and Kagan, which received a total of six votes, both indicated

that on-premise sign regulations are content neutral and

expressed that strict scrutiny would not apply to outdoor

advertising regulations merely because they provide an

exemption for on-premise signs. See id. at 2233 (Alito, J.,

concurring) (stating that “[r]ules distinguishing between on-

premises and off-premises signs” would not trigger strict

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Richards bears the burden to prove the exemptions survive the

applicable First Amendment scrutiny.

1. Exemption for on-premise “for

sale or lease” signs

An exemption for on-premise “for sale or lease” signs

is subject to a special “context-specific” scrutiny we crafted in

Rappa—the exemption must be “substantially related to

advancing an important state interest that is at least as

important as the interests advanced by the [overall prohibition],

. . . no broader than necessary to advance the special goal,

and . . . narrowly drawn so as to impinge as little as possible on

the overall goal.” 18 F.3d at 1065.

Secretary Richards has not carried her burden to show

the Interchange Prohibition’s exemption for on-premise “for

sale or lease” signs meets this context-specific test. She does

not present evidence of the specific government interests at

stake, nor does she show, as she must, that the government’s

interest in providing an exemption for on-premise “for sale or

lease” signs is “at least as important as” that served by the

Prohibition itself. Id. at 1065–67. She also does not present

evidence concerning the narrow tailoring of that exemption. In

scrutiny); id. at 2236–37 (Kagan, J., concurring in the

judgment) (finding it “challenging to understand why” strict

scrutiny would apply to sign regulations that do not suggest

government censorship or viewpoint discrimination).

In addition, because of its splintered reasoning, Town of

Gilbert did not establish a legal standard by which to evaluate

laws that distinguish between on-premise and off-premise

signs. We thus fall back to our precedent in Rappa for

reviewing sign regulations exempting on-premise signs. See

United States v. Tann, 577 F.3d 533, 541 (3d Cir. 2009).

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short, she has not carried her burden to justify the Prohibition’s

exemption for on-premise “for sale or lease” signs.

2. Exemption for on-premise signs

concerning activities on the

property

Under Rappa, an exemption for on-premise signs

concerning activities on the property is subject to intermediate

scrutiny, see 18 F.3d at 1067 & n.42—that is, it must be

“narrowly tailored to serve a significant governmental interest,

and . . . leave open ample alternative channels for

communication of the information.” Id. at 1075 (quoting Ward

v. Rock Against Racism, 491 U.S. 781, 791 (1989) (quoting

Clark v. Cmty. for Creative Non-Violence, 468 U.S. 288, 293

(1984))).

Secretary Richards has not carried her burden to justify

the Prohibition’s exemption for signs concerning activities on

the property. Indeed, the record does not satisfy any of the

prongs of intermediate scrutiny: it does not contain evidence

of the specific government interests furthered, nor evidence of

narrow tailoring, nor evidence that “ample alternative channels

for communication” are left open.

In sum, the lack of record evidence prevents us from

affirming the District Court’s entry of summary judgment

against Adams on its challenge to the Interchange Prohibition

based on First Amendment scrutiny. Accordingly, we reverse

that portion of the District Court’s ruling and remand for the

parties to litigate further Secretary Richards’ justification for

the restraint and its exemptions.

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C. The Injunction

Finally, we review the District Court’s entry of an

injunction prohibiting Secretary Richards from enforcing the

Act’s permit requirement until PennDOT establishes time

limits on its permit decisions.

The Act’s permit regime is a prior restraint on speech.

Riel, 485 F.3d at 756. As such, it “presents peculiar dangers to

constitutionally protected speech.” Freedman v. Maryland,

380 U.S. 51, 57 (1965) (discussing the dangers of prior

restraint in the context of motion-picture censorship). To

address those dangers, the First Amendment requires “strict

administrative time limits” on permit decisions and “the

possibility of prompt judicial review” of permit denials. City

of Littleton v. ZJ Gifts D-4, LLC, 541 U.S. 774, 779 (2004)

(construing FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 220–

21, 228, 239 (1990)).2 These requirements diminish the risk of

arbitrarily or “indefinitely suppressing permissible speech.”

Riel, 485 F.3d at 756 (quoting FW/PBS, 493 U.S. at 227).

There is no bright-line rule as to what a “strict

administrative time limit” is in this context, yet we easily

conclude the Act does not satisfy it in this case. For the Act

contains no time limit at all, and neither do the regulations

implementing it. In practice this has caused permit

applications to remain pending for prolonged periods of time—

sometimes more than a year, as occurred to Adams’ application

here. We thus agree with our District Court colleague’s

decision to enjoin Secretary Richards from enforcing the Act’s

2

Additional procedural safeguards apply to permitting regimes

that involve content-based determinations. See Thomas v.

Chicago Park Dist., 534 U.S. 316, 322–23 (2002).

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permit requirement until there is set a time limit that satisfies

the First Amendment.3

* * * * *

The Interchange Prohibition conveys clearly what it

prohibits, so we affirm the District Court’s dismissal of

Adams’ vagueness challenge. We also affirm the entry of an

injunction barring enforcement of the permitting requirements

under 36 Pa. Stat. § 2718.107 until PennDOT establishes

reasonable time limits for its permit decisions, as required by

the First Amendment. But we reverse and remand on Adams’

challenge to the Interchange Prohibition based on First

Amendment scrutiny. Although that provision is not subject to

strict scrutiny—but rather “context-specific” scrutiny under

Rappa for on-premise “for sale or lease” signs and intermediate

scrutiny for on-premise signs as to activities on the property—

Secretary Richards bears the burden to justify the restraint it

imposes and the exemptions it provides. She has not done so

on the current record. On remand she will have that chance.

3

On appeal Adams argued that the District Court did not go far

enough in the injunctive remedy it granted, as it should have

ordered the Pennsylvania General Assembly to amend the

statute to add a time limit. Given that neither we nor the

District Court has the power to grant that relief, see Murphy v.

NCAA, 138 S. Ct. 1461, 1481–82 (2018), we reject Adams’

request and sustain the remedy crafted by the District Court.

In addition, the Court did not abuse its discretion just because

it did not award the relief that Adams thinks “should” have

been granted. Adams does not offer any reason why the

injunction was insufficient to remedy § 2718.107’s

unconstitutionality, and we see none.

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